The still-struggling startup says its "long-term vision" is in real-money gaming.

It’s no secret that making money from virtual goods isn’t what it used to be, and no company exemplifies the decline of social gaming more than Zynga. But Zynga seems poised to be banking less on the likes of FarmVille and more on games like CasinoVille.

On Monday, the company announced it would be cutting 30 employees and would be closing or consolidating offices in Baltimore, New York, and Texas.

“These layoffs seem to be a continuation of the house cleaning Zynga has been doing since last year," Brian Blau, an analyst with Gartner Research, told Ars. "They had previously announced layoffs and were taking other actions to realign the company, which means making adjustments to the games and the teams that develop and maintain them.”

However, analysts note that investors have responded well to the fact that Zynga seems to be pivoting toward real-money online gambling. The company has plans to launch such games in the United Kingdom later this year.

Since the new year, Zynga’s stock price has been on a slow climb—it’s up around 40 percent since January 1, 2013. (Though, as of this writing, Zynga’s stock price was down nearly two percent on the day, hovering around $3.36 per share.)

In December 2012, Zynga filed a “preliminary finding of suitability” with the Nevada Gaming Control Board, the first step toward offering real-money gambling in the US. "These are all steps that are moving us toward our long term vision in real money games," the company's COO, David Ko, told investors earlier this month.

Just last week, Nevada became the first state to allow online gambling within its own state borders—New Jersey, Delaware, and California are also moving ahead with similar legislation.

"Zynga has to be careful, though, as gambling sometimes has negative consequences for individuals," Blau added. "So hopefully they will put mechanisms in place to keep real money games entertaining more than their ability to drain your bank account. In any case, I don't think much of this matters until the legislative process slowly moves along, and because of that main limitation it will still be a long time before Zynga sees any direct impact from real money games."

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

My wife is going to be crushed if Castleville dries up. She spends more time poking at that one thing that I do all the games and platforms I own, combined. Of course she's never spent a single dollar on it so I can understand why Zynga is having trouble.

I mean, aside from being run by one of the biggest assholes ever to appear in the gaming industry. That probably doesn't help.

"Zynga has to be careful, though, as gambling sometimes has negative consequences for individuals"

I get the feeling that someone has never heard of Zynga before. Or gambling for that matter. An expert analyst actually made that statement?

Anyway, building a social structure through which a company can target low-self-esteem/low-self-control individuals with deep pockets ("whales") has been their specialty online, and is essentially what the casino industry is as well. Thing is, it isn't just online social games that are collapsing...

Zynga putting "mechanisms in place to keep real money games entertaining more than their ability to drain your bank account"?? Seriously? Are we talking about the same company that charged people $20 for an extra 5 minutes of playtime on otherwise free games??

I know people like to think it was Zynga's horrible treatment of employees and copying practices brought them down. If that were the case, Amazon and Samsung would be out of business now. I think it was due to their business model of copying what was already successful. The problem is it quickly became a "too little too late" model. They paved the way for "freemium" but they did so by taking other peoples ideas. Now you have tons of freemium games that are actually original. They are all based on a fundamental formula of getting players invested and hoping they'll want to pay for an advantage, but concepts and gameplay are newer.

They were out innovated by other freemium developers making games that people want to play.

The problem with Zynga is that games have been becoming more social over time. I bought Black Ops II and Halo 4 and rarely play out the campaign mode, if at all. I have more fun yelling at the screen because I got n00b tubed than playing FishVille (yes, I have played FishVille). In fact, I can't even remember the last time I played FishVille. I would remind myself to go feed my fish, but seeing as they're likely dead, no point really.

In fact, I believe that games like Halo 4 and CoD are more social than games like FarmVille and FishVille because you truly interact with the other players whether you're double teaming to kill someone or getting double teamed and are dying (and losing).

I think a big part of the downfall of "social" gaming was that the games had a huge flaw, it that they got less entertaining, and more like work the more you played them. Games were too transparently designed to get you to addicted so that you would pay to reduce the ever lengthening build times. The inevitable result is that people get sick of them (I certainly did).

Also, obviously, people now use their phones for games more than Facebook.

My wife is going to be crushed if Castleville dries up. She spends more time poking at that one thing that I do all the games and platforms I own, combined. Of course she's never spent a single dollar on it so I can understand why Zynga is having trouble.

I mean, aside from being run by one of the biggest assholes ever to appear in the gaming industry. That probably doesn't help.

You can introduce her to something like Animal Crossing, or the Sims. If she spends so many time in that kind of games, maybe she wants something more juicy.

The good news: People recognized Zynga as the fad it was (plus many other similar fads) from day 1, and never took them seriously, so we didn't see any articles about "the new Zynga economy", fortunately. Nowadays, people have learned to recognize a fad, they just play along for as long as it lasts. Fads are the new fad.

I wonder why Zynga doesn't consider getting into drug dealing too. I hear there's good money in it, as long as they're careful, since getting hooked on addictive drugs sometimes has negative consequences for people.

The last Zynga game I downloaded for my phone kept hounding me constantly to pester my friends about every little accomplishment I made in the game. And it wasn't even a very fun game, just some clone of other puzzle games I've already played. I deleted it within a day or two.

Why doesn't Zynga just hire creative developers who can come up with games that are original and fun? I know it's not THAT easy, but lots of other companies manage to do it. Is there something in the company's mission statement that says "clones only?"

My wife is going to be crushed if Castleville dries up. She spends more time poking at that one thing that I do all the games and platforms I own, combined. Of course she's never spent a single dollar on it so I can understand why Zynga is having trouble.

I mean, aside from being run by one of the biggest assholes ever to appear in the gaming industry. That probably doesn't help.

You can introduce her to something like Animal Crossing, or the Sims. If she spends so many time in that kind of games, maybe she wants something more juicy.

I have, she got into Animal Crossing back on the Gamecube and she owns Sims 2 and 3 along with every expansion pack for each. She really enjoyed the Sims 3 but lost interest entirely after save game bugs wrecked her progress on multiple occasions. Animal Crossing went away with the Gamecube itself, but I've discovered that these days she doesn't really care much for anything she can't play on her laptop.

I'm always looking for things she'll like but she plays games very differently than I do and has a MUCH lower tolerance for bugs. I'm still trying to get her into Civilization or Sim City but it's been a tough road so far. Facebook games on the other hand are simply "there" and by and large always work.

I just don't understand how they can lose that much money. What do they spend it on? The games aren't so complicated they should need huge development teams. The mechanics are really pretty simple. Sure they need to manage some servers, but again the load there doesn't seem to be that big. It's not like a FPS server which is updating game state for the players on a millisecond basis. It seems like they should be basically printing money but yet somehow they are squandering tens of millions somewhere. Amazing. Methinks whoever invested in Zynga should be looking for a good lawyer.

Still, more original than their game ideas blatantly stolen off others.

Build your own casino and let your friends visit and gamble real money, with the incentive that you get a small (vanishingly small, and only paid out when you hit a certain threshold) cut

This will fail because the reality of Casinoville will not be thousands of people gambling, but rather thousands of people operating their own deserted casino, trying to lure other people into gambling but failing to do so because everyone will want to make money rather than spend any.

Basically, the same failure as the Amway model: too many people recruiting, nobody buying.

I just don't understand how they can lose that much money. What do they spend it on? The games aren't so complicated they should need huge development teams. The mechanics are really pretty simple. Sure they need to manage some servers, but again the load there doesn't seem to be that big. It's not like a FPS server which is updating game state for the players on a millisecond basis. It seems like they should be basically printing money but yet somehow they are squandering tens of millions somewhere. Amazing. Methinks whoever invested in Zynga should be looking for a good lawyer.

I know people like to think it was Zynga's horrible treatment of employees and copying practices brought them down. If that were the case, Amazon and Samsung would be out of business now. I think it was due to their business model of copying what was already successful. The problem is it quickly became a "too little too late" model. They paved the way for "freemium" but they did so by taking other peoples ideas. Now you have tons of freemium games that are actually original. They are all based on a fundamental formula of getting players invested and hoping they'll want to pay for an advantage, but concepts and gameplay are newer.

They were out innovated by other freemium developers making games that people want to play.

I just don't understand how they can lose that much money. What do they spend it on? The games aren't so complicated they should need huge development teams. The mechanics are really pretty simple. Sure they need to manage some servers, but again the load there doesn't seem to be that big. It's not like a FPS server which is updating game state for the players on a millisecond basis. It seems like they should be basically printing money but yet somehow they are squandering tens of millions somewhere. Amazing. Methinks whoever invested in Zynga should be looking for a good lawyer.

- Cons: Hours can be long and the work can be very demanding depending on the team you're on, as well as your project/studio situation. Too many project managers that think they are expert artists and designers, which often result in bad decisions. Executive Staff emphasize innovation, but studio and middle managers seem to contradict that notion in favor of revenue and metrics-based priorities.